THE ALLENDE REGIME IN CHILE: GROWING PROBLEMS AND NARROWING OPTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00967A000400030007-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 20, 2016
• Document Release Date: August 16, 2006
• Sequence Number: 7
• Publication Date: January 28, 1972
• Content Type: MEMO

OFFICE OF
NATIONAL ESTIMATES
MEMORANDUM
The Allende Regime in Chile:
Growing Problems and Narrowing Options
Secret
28 January 1972
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Secret
Copy No.
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CENTRAL INTELLIGENCE AGENCY
OFFICE OF NATIONAL ESTIMATES
28 January 1972
SUBJECT: The Allende Regime in Chile: Growing Problems and
Narrowing Options*
The rebuke to President Allende's government in the recent
by-elections underscores its growing problems and narrowing po-
litical options. Allende made remarkable progress during his
first year in office in advancing the revolutionary program of
his Popular Unity (UP) coalition. But the honeymoon is over.
The opposition now is fighting back more effectively; much of
the public is disgruntled over both political and bread-and-
butter issues; the military are becoming wary of a breakdown in
public order and of mounting national difficulties generally.
These problems exacerbate divisions among Allende's supporters
--between those who would seek immediate confrontation and emas-
culation of the opponents of the revolution, and those who would
reach the same ends gradually through finesse and erosion.
The Allende regime can probably avert a sharp decline in
consumer well-being over the next several months by renegotia-
ting the repayment of its external debts or repudiating them
outright and by receiving some help from Communist countries.
But this would not solve Chile's basic economic problems, which
would require a painful shift in priorities at home from consump-
tion to investment and productivity, and a large expansion as well
either in exports or foreign loans.
* This memorandum was prepared by the Office of National Estimates
and discussed with other components of the CIA, who are in
general agreement with its judgments.
GROUP I
Excluded from automatic
downgrading and
decloruIRcation
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Allende continues to possess important assets that strenghten
his political hand, including the power and prestige of his office
and the leverage from the expanded economic role of the state.
Nonetheless, there are imposing constraints on him whether he
attempts to maintain a rapid pace of revolutionary changes over
the next year, or whether he decides to conciliate the opposi-
tion and consolidate the gains made so far. We doubt that he can
risk bold confrontation and authoritarian repression without a
sharp reaction from the political opposition (supported by a good
part of the public) and an equally sharp rebuke from the military.
If he were to go too far in conciliating the political center --
even if only for tactical reasons -- he would unleash the wrath
of extremists in and out of the UP. They could. provoke tensions
and disorders that would once again galvanize military concern.
Thus such a course would require that he exert forceful control
over the leftist extremists.
Allende'simmediate political strategy is not yet clear.
The conflicting pressures on him were illustrated by the con-
siderable delay that preceded the naming of his new cabinet.
Faced by an increasingly effective opposition, persistent di-
visions within his own camp, a wary military, and a growing
economic malaise, simply maintaining his position and consoli-
dating the revolutionary changes made so far will tax Allende's
considerable political skills and assets.
********.
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Growing Problems
1. During Dr. Salvador Allende's first year in office
his Popular Unity (UP) government carried out a substantial por-
tion of its revolutionary program and appeared to be making-rapid
progress towards the goal of permanently changing Chil,e's,polii-
tical and economic system. In recent months, however, President
Allende appears to have lost the initiative. His problems-are.
growing and the constraints on his freedom of action are becoming
more formidable.
2. In part, this change in Allende's political fortunes
followed a ,predictable pattern: The honeymoon is over; the easy
and popular measures have already been taken. Allende's most
dramatic moves during his first year were aimed at gaining-con-
trol of "the commanding heights" of the Chilean economy by~expro-
priating major foreign and domestic companies. Since-many-of
these actions enjoyed widespread public backing -- especially the
nationalization of US copper interests -- the opposition-lacked
an issue on which-it could galvanize popular sentiment against
the regime. Allende's measures to redistribute personal income
in favor of the poorer classes also temporarily handicapped his
political opposition. Furthermore, the main opposition force, the
Christian Democratic Party (PDC), was inclined to believe that
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Allende would not or could not try to alter the Chilean political
system so as to circumscribe opportunities for effective opposi-
tion at some future point.
3. The government's policy of allowing sharp wage increases
while controlling prices worked initially to redistribute income
in favor of the poor, and triggered a consumer spending spree-
which liquidated inventories and absorbed the country's idle,in-
dustrial capacity. In time, however, government policies led to
shortages of a wide variety of consumer goods. There has been
little new investment in industry or agriculture. Domestic food
production has also been affected adversely by the regime'-s~accel-
erated program of agrarian reform and by the rash of illegal land
seizures carried out by peasants under the leadership of the Left-
ist Revolutionary Movement (MIR). Finally, Chile has suffered a
precipitous decline in foreign currency reserves, partly because
of a decline in copper earnings and an increase in imports of food
and consumer goods, but also because the worsening political and
economic atmosphere led to a net outflow of capital. Late i-n 1971,
shortages of food (particularly meat) grew worse, and the con-
sumption levels of the poorer classes probably began to decline,
even though they remained above the pre-Allende levels.
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4. Starting in September 1971, a series of government moves
shocked and angered key Christian Democrats, The measures-caus-
ing alarm included: scurrilous UP attacks on ex-President Frei;
the reneging by Allende on specific political bargains he made
with the PDC; UP efforts to muzzle the opposition press and to
gain political control of the University of Chile; and the Presi-
dent's plan to alter the constitutional system, via a plebiscite
if necessary. Perhaps for the first time a general feeling de-
veloped within the PDC that Allende might be determined to go
beyond the customary efforts of a Chilean chief executive to
reduce the strength of the political opposition and in fact was
bent on destroying it and thereby imperiling Chile's democratic
institutions. This prompted the center-left PDC to join-with'the
conservative National Party in forceful and concerted anti-regime
efforts.
5. While it may have been concern over the future,of the
country's political system that prompted the rival opposition
parties to compose their differences and seize the political
initiative, it was the declining state of the economy that pro-
vided an issue to mobilize popular anti-regime sentiment. The
1 December "march of the empty pots", organized by the opposition
parties to protest food shortages as well as threats to democracy,
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drew more support from angry Chilean housewives than had-been
anticipated even by the sponsors. Popular disenchantment-also
cut into the size of the crowd the UP was able to organize to
give Fidel Castro a send-off at the end of his month-long visit
to Chile. Such signs of a shift in popular support emboldened
the opposition.
6. Initially the UP reacted to the 1 December demonstra-
tion by charging the opposition with "fascist sedition", darkly
hinting that the protestors were in league with foreign imperia-
list interests. But the regime was unsuccessful in its efforts
to mobilize the masses so as to turn the tide in "the battle,of
the streets". A PDC rally in Santiago on 16 December drew,a much
larger turnout than its UP counterpart four days later, despite
Allende's presence at the latter. This development must have led
the regime to wonder about the extent and depth of its popular
support. The UP, moreover, was very much disturbed by a series
of effective moves by the opposition. Government efforts to_
capture control of the supply of paper and newsprint were stalled,
and at the University of Chile the Christian Democratic rector
and students backing him effectively countered UP efforts to gain
complete control. In the congress the opposition cut A llende's
budget request in key areas and impeached his close associate,
Interior Minister Jose Toha.
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7. Adding to the pressures on the government, there were
signs that the military, whom Allende has assiduously courted
since he took office, were deeply disturbed by the 1 December
demonstration. The generally middle-class officers were
bothered particularly by the spectacle-of the Chilean security
forces firing teargas at the protesting housewives. Allende's
inflammatory rhetoric, which appeared to invite further street
confrontations, contributed to military disquiet. The discontent
of ranking military officers probably influenced Allende to re-
duce the tensions.
8. The recent triumph of candidates representing-a de facto
PDC-National coalition in two by-elections has added to the evi-
dence of a shift in the balance of political strength-between,
Allende and the opposition. Allende took office with only 36 per-
cent of the popular vote in the election of September 1970. The
UP, however, was able to garner about 50 percent of the-vote in
the municipal elections of April 1971, and proclaimed this to be
an unquestioned popular mandate for the regime. But in the
January 16 canvass, despite massive UP efforts, the opposi-tion
won both contests. The opposition totals (53 and 58 percent of
the vote) represented an increase of several points in-the share
of the vote the PDC and National parties had gained through
separate tickets in the two areas in April 1971.
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9. The opposition offensive, concern over growing military
disenchantment and declining political support, and, possibly,
pessimism over economic prospects combined to persuade Allende
that a policy of polarizing the Chilean body politic was hazardous,
even before the January by-election. The President and some other
UP spokesmen began placing less stress on eradicating the"fascist"
menace and called for a "dialogue" with the opposition. Indeed,
Allende reportedly held secret meetings with key Christian Demo
crats. One of the immediate results was a resolution of the poten-
tially explosive-conflict between the UP and opposition forces-at
the University of Chile, with a compromise formula widely construed
as a victory for the anti-UP forces. Allende's setback in the
election merely made the search for a new departure more urgent.
The Doctor's Dilemma
10. Allende's oscillation between an aggressive and a con-
ciliatory line toward the political center reflects, in part, a
continuing conflict within the UP on the matter. The Communist
Party views bargaining with the PDC both as necessary to maintain
the UP in office and as a useful tool for dividing and weakening
the opposition. Many key leaders of Allende''s own Socialist Party,
on the other hand, are hostile to this approach. For them, nego-
tiations with the PDC conjures up a spectre of compromise with
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"the class enemy" that carries with it the seeds of betrayal of
the Chilean revolution. Instead, the Socialists advocate~a policy
of confrontation and demand rapid replacement of the bourgeois
political institutions inherited by the Allende regime.i/. For
their part the leaders of the PDC are anxious to control- the terms
of any sustained cooperation with the government. They would be
wary of any efforts by Allende to split the party or somehow to
use PDC support solely to further the interests of the UP.2/
11. The more Allende leans toward give-and-take-cooperation
with the political center, the more he would be in jeopardy-of
losing the support of the radicals in and out of his coalition.
In this context, the Castroite MIR poses a particular threat to
Allende's freedom of action. It has maintained an uneasy de facto
alliance with the UP which at times appeared to be more like a
truce preceding an inevitable confrontation. Irked by,government
moves to curb the Vil gal property seizures they have organized,
The Socialists in particular favor a constitutional amendment
to replace the present two-house Legislature with a unicameral
body that presumably UP forces would control. They urge Allende
to get around opposition objections by submitting the issue to
a plebiscite. At Least for the moment, Allende probably Lacks
confidence that the measure would gain a popular majority. It
is unlikely in any case that the measure could become Law before
the March 1973 congressional elections.
2/ The PDC has already suffered two schisms from its far left, to
the benefit of the UP, one in 1969 and another Last year.
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by Allende's respect for "bourgeois legality", and by the cur-
rent efforts to conciliate the opposition, the MIR may be on the
verge of charging the government with outright revolutionary
betrayal and of reverting to a policy of revolutionary violence.
The Role of the Military
12. The military are growing increasingly restive. There
is little evidence, however, that they are presently disposed to
break with their strong tradition of support for constitutional
government. Some military officers are already planning for-a
coup and are soliciting support within the officer corps, but we
do not believe they have broad or deeply committed support-as yet.
Most key officers, though increasingly wary of the UP extremists
and concerned about growing tensions and problems, still support
Allende as the constitutional President. They probably feel that
they can preserve their institutional integrity and block policies
they consider disastrous by selective pressures on the President.
13. Certain developments would speed the plotting within
the military and would erode Allende''s positive support among
key officers. The military would be greatly disturbed if Allende
were caught in an egregious violation of the constitution, or if
they were called upon repeatedly to put down popular disorders.
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Allende is well aware of this danger and probably would not be
so imprudent as to risk military reaction by acting in a bla-
tantly unconstitutional manner. But popular disorders stemmi-ng
from worsening economic conditions or from agitation by extremists
could be beyond his capacity to control. If the military decided
to act they would probably try first to.negotiate with Allende
in an effort to influence-his-actions. If they failed in this,
the pressures for a coup would increase.
14. Another circumstance that might impel the military
towards serious anti-regime plotting would be a perceived-threat
to their institutional integrity and responsibilities. If the
UP parties go too far in efforts to politicize the armed forces,
or if illegal para-military groups became increasingly active,
the instinct for self-preservation among senior officers could
overcome traditional military circumspection.- Themilitary al-
ready have chafed at what they view as half-hearted government
efforts to check the excesses of the MIR. If the MIR were-to
resort to a major and sustained campaign of terrorism against
the opposition, rightist groups would probably retaliate i-n'kind.
The military-and the national police (Carabineros) as well would
insist on a relatively free hand in fulfilling their constitu-
tional responsibility to restore order. Knowing that a refusal
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might trigger serious coup plotting,.Al1ende-would be likely,
under these circumstances, to:approve=harsh measures-against
the MIR, to save his regime and consolidate-the revolutionary
advances already made.
Economic Problems
15. How well Allende fares politically over-the-next year
or so will depend in large measure-on the performance of-the
economy. His government has taken a number of steps to,ameli-
orate the shortages of consumer-goods.- It has-extended-its,-
controls over imports and wholesale trade as well as the retail
distribution of meats. Various deals for emergency supplies-of
foodstuffs from abroad have been-worked-out -- e.g., for Argen-
tine beef.. Pending a renegotiation of Chile's foreign debt, a
moratorium-on payments has been declared, and-this has-averted
a sharp curtailment of imports. These measures will-probably
forestall a-major worsening of consumer shortages for-several.
months -- perhaps for longer. But they cannot resolve the basic
imbalances between supply and demand. This would require--a
sharp reorientation of priorities-at home from consumption to
investment and productivity and a sizeable expansion as well
either in exports or foreign loans.
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